Nestle has promised to rename its Red Skins lollies, saying the name is now "out of step" with the company's values.
"This decision acknowledges the need to ensure that nothing we do marginalises our friends, neighbours and colleagues," the company said in a statement.
"These names have overtones which are out of step with Nestle's values, which are rooted in respect. While new names have not yet been finalised, we will move quickly to change these names."
The packaging on Red Skins was changed a few years ago to a plain red and purple wrapper. It had previously featured a Native American wearing a full headdress.
They also plan to change the name of Chicos lollies, which aren't available in New Zealand but are seen as racially insensitive to Latin Americans.
There have long been calls to ditch both names.
There continues to be backlash against the Washington Redskins, a National Football League team in the US, over its name.
The ongoing Black Lives Matter protests across the world has triggered action against racially offensive statues, names, entertainment and food.
Calls are growing to rename Coon cheese after Australian comedian Josh Thomas reignited the debate last week.
Saputo Dairy Australia, which sells the cheese, said Coon was named in recognition of "the work of an American, Edward William Coon, who patented a unique ripening process that was used to manufacture the original Coon cheese".
Indigenous academic, writer and activist Dr Stephen Hagan has repeatedly led the charge to get rid of the name Coon, which has long been seen as a derogatory term for Aborigines.
There have also been calls for Colonial Brewing Company, an Australian beer brand, to be renamed.
Allen's Lollies, which is owned by Nestle and sells both Red Skins and Chicos in Australia, issued a similar statement on renaming the lollies.
"At Allen's we are about creating smiles. Today we announced that we will change the name of Red Skins and Chicos lollies," the company said.
"This decision acknowledges the need to keep creating smiles, ensuring that nothing we do marginalises our friends, neighbours and colleagues, or is out of step with our values.
"We haven't finalised the new names, but we'll keep you posted. We appreciate the comments we have received on the need for change."